Flight Centre (FLT)

Shares in
Flight Centre
jumped nearly 4 per cent on Tuesday after the travel agent delivered a 19.6 per cent increase in underlying profit before tax for the 2010-11. Sales were the best on record, with the total transaction value of booked flights and holidays up 12 per cent to $12.2 billion. Management is bullish on the outlook for the company, with a target of 10 per cent growth in underlying profit before tax for the 2012 financial year. The stock is down about 25 per cent this year amid investor jitters that have affected a range of consumer discretionary stocks. But analysts think the stock is ripe for an upturn, with an average 12-month target price of $23.86 and a majority with “buy" ratings. Deutsche Bank analyst Raymond Gonzalez says the stock looks good value on a 2012 price-earnings ratio of about 10, “particularly given 10 per cent forecast profit growth, a strong balance sheet, and a leading market position in Australia".